Fordham Law
Fordham Law School banner photo


Are the Loan Terms Different for each of the Federal Loans I Borrowed?


Prior to 7/1/12, graduate students could borrow up to $8,500 in a Direct Subsidized Federal loan.  This Subsidized loan accrued no interest while the student was in school, plus six months thereafter.  When the Subsidized loans go into repayment status at the end of the six-month grace period, interest will accrue on these loans at the fixed rate of 6.8%.  After 7/1/12, graduate students were no longer eligible to borrow a Subsidized Loan. 

The Unsubsidized Federal Direct Loans borrowed prior to 7/1/13 accrued interest from the date of each disbursement at the fixed rate of 6.8%.

Unsubsidized Federal Direct loans borrowed after 7/1/13 and prior to 6/30/14 will accrue interest at the fixed rate of 5.41% for the life of the loan.

Federal Direct Grad PLUS Loans borrowed after 7/1/10 and prior to 6/30/13 accrued interest from the date of each disbursement at the fixed rate of 7.9%.

Federal Direct Grad PLUS Loans borrowed after 7/1/13 and prior to 6/30/14 will accrue interest at the fixe rate of 6.41% for the life of the loan.

Academic Year Direct Subsidized Loan Direct Unsubsidized Loan Direct Grad Plus Loan
2010-11 0% in school & grace;
6.8% in repayment
6.8% 7.9%
2011-12 0% in school & grace;
6.8% in repayment
6.8% 7.9%
2012-13 Unavailable to
graduate students
6.8% 7.9%
2013-14 Unavailable to
graduate students
5.41% 6.41%

Undergraduate Federal Stafford Loans may have interest rates that are fixed or variable.  Before the 2006-07 academic year, the interest rate on Federal Stafford Loans was variable and it changed every July 1st.  Some law students may have variable rate Stafford Loans (FFELP or Direct) that they borrowed as undergraduates, and they may have consolidated those loans with a FFELP lender to take advantage of locking in the low interest rate for the life of the loan.  Again, it is important to distinguish if these consolidation loans are FFELP or Direct Consolidation Loans, particularly if the borrower plans to take advantage of the Federal Public Service Loan Forgiveness Program or the Pay As You Earn (PAYE) Repayment Plan.  Only Direct Loans and Direct Consolidation Loans are eligible for Federal Loan Forgiveness and the PAYE Repayment Plan.

For a complete listing of your Federal education debt, please log on to www.nslds.ed.gov.  To obtain additional information for each loan listed, click on the number of the loan. 

There are no penalties for prepayment of your Federal loans.

In the event of death or total and permanent disability, FFELP Stafford and Grad PLUS, as well as Federal Direct and Direct Grad PLUS Loans will be cancelled.